BRITAIN'S economy has continued to defy expectations of a Brexit-induced slump after the manufacturing and construction industries capped off 2016 with robust growth.

Figures from the Office for National Statistics (ONS) showed construction output beat expectations to rise by 1.8 per cent in December, up from a revised 0.4 per cent in November.

Manufacturing output also grew more quickly than economists had predicted by lifting 2.1 per cent in December, while official data revealed Britain's trade gap narrowed in the final month of last year.

The goods and services deficit - the gap between exports and imports - shrunk by £300m to £3.3bn in December after the export of goods to non-EU countries rose by £1.1bn.

Kate Davies, ONS senior statistician, said a pick-up in the exports of oil and aircraft had helped the trade gap decrease by £5.6bn to £8.6bn between the third and fourth quarter of 2016.

However, she said there was "little evidence" to suggest the collapse in the value of sterling since the Brexit vote had made an impact on the trade balance.

She added: "Industrial output and the construction sector both remained broadly flat over the final quarter of 2016 but grew in December, with manufacturing growth driven by a strong month for often volatile pharmaceuticals and the expansion in construction led by house and commercial building."